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Are we playing only half-court tennis to manage our Supply Chain?
Most large companies still operate on monthly demand forecasts to derive various supply chain actions of procurement, production and distribution. This is like playing half-court tennis, focused on only our side of the court.
Once we hit our shots (demand drivers like consumer promotions, trade offers, advertising, distribution expansion, price changes), we expect the ball to return in a particular way so that we can play the next shot.
It doesn’t happen that way.
Opponent’s shot often surprises us. If we expect a lob to the back end, we may instead encounter a finely executed drop shot. We then struggle to play our shots and possibly end up losing the game.
It doesn’t have to be this way.
Good players play full-court tennis, focused on the opponent’s movements and actions as well. They can anticipate a drop shot much better and much earlier, so that they can respond properly and end up winning the game.
What are the learnings for supply chain?
Half-court tennis is akin to Forecast Driven Supply Chain, where we keep playing our shots without studying ongoing moves of the opponent. Full-court tennis adds the vital element of ‘Demand Sensing’, which informs us of the opponent’s moves and shots well in advance of these landing in our side of the court.
Are you still playing half-court tennis?
Would love to hear your comments…